Organizational learning is increasingly recognized as a key capability for competitive advantage. For the last couple of decades, there has been enormous debate and discussion on various related subjects such as learning organization, organizational learning, knowledge management, and competency development. The meaning, methodology, and measurement of all these approaches have all been the focus of these discussions. Organizations have also spent substantial amounts of money towards accomplishing a culture of learning, but the outcome of these investments is a huge suspect. Part of the problem also has to do with not being clear with results and outcome organizations wanted to see. Measuring organizational learning is difficult, though not impossible. More importantly, many of these initiatives had a cultural aspect in them, and when this aspect is not paid due attention, the results are bound to be disappointing.

Edgar Schein needs no introduction to those who are interested in the exciting field of organizational culture. His seminal work is read and practiced by many leaders and organizations worldwide. In 1996, Schein published some exceptional work in the area of organizational learning and helped organizations understand the impact of what he then called as ‘the three cultures of management’ that had tremendous impact on organizational learning. Organizational learning, according to him, is an imperative for innovations to occur and even more importantly for them to survive and proliferate. Failure to generate organizational learning was often attributed to a) resistance to change; b) human nature; and c) leadership failure. Schein believes that the more fundamental reason why organizational learning does not happen is because of the fact that three distinct management cultures that come to characterize organizations are not often aligned.

Cultures and Subcultures in Organizations

Before we proceed to understand the three cultures that consume all organizations, let us define what we mean by culture here. In this context, a culture is a set of basic tacit assumptions about how the world is and ought to be that a group of people share and which, in turn, determines perceptions, thoughts, feelings, and to some degree their behavior. This culture manifests itself at three different levels. At the deepest level, it is manifested as tacit assumptions; at a slightly higher level, it takes the shape of espoused values that reflect what a group of people wish to be and the way they want to present themselves publicly; and at the next higher level, it is day-to-day behavior that represents a compromise among the espoused values and deeper assumptions based on the immediate requirements of the situation.

Cultures, as understood above, derive from the histories and experiences of organizations for a long time. Thus IBM, Hewlett-Packard, General Electric, and such other companies that have had several years of success will likely have an organizational culture that pretty much drives how their employees feel, think, and act. Shared assumptions are typically formed around the functional units of an organization. They are often based on the employees’ educational backgrounds or their organizational experiences; more often it is the latter than the former. We refer to these as ‘stove pipes’ or ‘silos’. It is for this reason that many organizations have challenges in bringing about cross-functional teams to work on projects. And then there is also a hierarchy-based culture in organizations.